Are We Still in a Recession? (Answer Depends on Who You Are)
Are we still in a recession? That question occurred to me recently. It's kind of surprising there hasn't been much about it either way in the news lately. On the one hand, parts of the economy have been doing quite well. Others... maybe not so much? It's unclear.
Clearly things were bad last year in the spring. The National Bureau of Economic Research (NBER) determined that the recession started in February 2020. They haven't said anything about when it has ended. I know; I checked.
While checking I found this Reuters article, "Is it over yet?" from a month ago (4 May 2021) stating, among other things, that yeah, the NBER is very cautious in declaring a beginning or end to things. Indeed, they only concluded in June that the recession had started in February. Even that four-month lag was quick compared to their past calls. It took them a year to determine that the Great Recession had started!
Okay, so if officials are only going to tell us officially when something is over when it's "No shit, Sherlock!" obvious, what can we figure for ourselves? Well, let's look at the stock market.
I obtained this chart from Yahoo! Finance showing the S&P 500 Index from November, 2019 to present. You can see the precipitous drop following a market high on Feb. 19. That's a key indicator, possibly the only key indicator, the NBER used to determine the beginning of the recession. Of course, by the time they figured that out in June, 2020, the market was already well on its way to a recovery. By August the market had already eclipsed its previous high (trace across the dotted line I provided) and has gone on to grow 20% beyond a full recovery.
So, by stock market indicators, the pandemic recession ended 10 months ago. For the rich the pain was short lived, and the rich are now richer than ever. As I've noted before, though, the market is not the economy. While the rich have done well, others may still suffer.
What's another indicator? How about unemployment. I looked up unemployment statistics and found this bare-bones but effective chart from the Bureau of Labor Statistics:
Unemployment hit a high of almost 15% in April, 2020. Since then it has recovered... but not to its pre-pandemic levels. In late 2019 unemployment stood at about 3.6%. Today it remains just above 6%. That's still a lot of people who aren't back to work yet. ...And coming out of recessions these figures are generally considered an under-count. That's because people who've been out of work long term and have given up looking for work are not counted in the statistic.
So, for the investor class, the recession ended months ago. For the working class, especially those working in sectors hard hit by shutdowns, we're not over it yet.
Take-home essay question: Why, when these charts took me less than a minute each to find, has there been so little coverage in the news?
[This entry was cross-posted from https://canyonwalker.dreamwidth.org/67617.html. Please comment there using OpenID. That's where most of the action is!]
Clearly things were bad last year in the spring. The National Bureau of Economic Research (NBER) determined that the recession started in February 2020. They haven't said anything about when it has ended. I know; I checked.
While checking I found this Reuters article, "Is it over yet?" from a month ago (4 May 2021) stating, among other things, that yeah, the NBER is very cautious in declaring a beginning or end to things. Indeed, they only concluded in June that the recession had started in February. Even that four-month lag was quick compared to their past calls. It took them a year to determine that the Great Recession had started!
Okay, so if officials are only going to tell us officially when something is over when it's "No shit, Sherlock!" obvious, what can we figure for ourselves? Well, let's look at the stock market.
I obtained this chart from Yahoo! Finance showing the S&P 500 Index from November, 2019 to present. You can see the precipitous drop following a market high on Feb. 19. That's a key indicator, possibly the only key indicator, the NBER used to determine the beginning of the recession. Of course, by the time they figured that out in June, 2020, the market was already well on its way to a recovery. By August the market had already eclipsed its previous high (trace across the dotted line I provided) and has gone on to grow 20% beyond a full recovery.
So, by stock market indicators, the pandemic recession ended 10 months ago. For the rich the pain was short lived, and the rich are now richer than ever. As I've noted before, though, the market is not the economy. While the rich have done well, others may still suffer.
What's another indicator? How about unemployment. I looked up unemployment statistics and found this bare-bones but effective chart from the Bureau of Labor Statistics:
Unemployment hit a high of almost 15% in April, 2020. Since then it has recovered... but not to its pre-pandemic levels. In late 2019 unemployment stood at about 3.6%. Today it remains just above 6%. That's still a lot of people who aren't back to work yet. ...And coming out of recessions these figures are generally considered an under-count. That's because people who've been out of work long term and have given up looking for work are not counted in the statistic.
So, for the investor class, the recession ended months ago. For the working class, especially those working in sectors hard hit by shutdowns, we're not over it yet.
Take-home essay question: Why, when these charts took me less than a minute each to find, has there been so little coverage in the news?
[This entry was cross-posted from https://canyonwalker.dreamwidth.org/67617.html. Please comment there using OpenID. That's where most of the action is!]